Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Detroit Mayor challenges U-M to analyze root causes, patterns of murders in city

Lam on what helps and hurts in world-wide youth unemployment

Buchmueller says must-access program curbs doctor-shopping for opioids

More News

Highlights

Bailey, Eisenberg , and Fomby promoted at PSC

Former PSC trainee Eric Chyn wins PAA's Dorothy S. Thomas Award for best paper

Celebrating departing PSC trainees

Bloome finds children raised outside stable 2-parent families more likely to become low-income adults, regardless of parents' income

More Highlights

What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement

Archived Abstract of Former PSC Researcher

Hanlon, Michelle, and Joel Slemrod. 2009. "What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement." Journal of Public Economics, 93(1-2): 126-141.

We study the stock price reaction to news about corporate tax aggressiveness. We find that, on average, a company's stock price declines when there is news about its involvement in tax shelters. We find some limited evidence for cross-sectional variation in the reaction. For example, the reaction is more negative for firms in the retail sector, suggesting that part of the reaction may be a consumer/taxpayer backlash. In addition, the reaction is less negative for firms that are viewed to be generally less tax aggressive, as proxied by the firm's cash effective tax rate. We interpret this as being consistent with the market reacting positively to evidence that a firm is trying to reduce taxes when their financial reports would lead one to believe the firm is not tax aggressive. (c) 2008 Elsevier B.V. All rights reserved.

DOI:10.1016/j.jpubeco.2008.09.004 (Full Text)

Country of focus: United States of America.

Browse | Search : All Pubs | Next